Donald Trump again wants to bribe Americans. At the phony Republican mid-term convention in September, he promised all adults $5,000 if Republicans maintain control of the House and Senate after the November election. Anyone paying attention over the past 2 years, or for that matter at any point during the Donald’s career, should realize there is no chance he will make good on his pledge.
Let’s consider some recent examples. During the 2024 election candidate Trump promised “no taxes on Social Security” if he became President. To achieve this, his 2025 Big Beautiful Bill increased the standard deduction by $6,000 for those 65 and older. Previously, two-thirds of people collecting Social Security paid no taxes on their benefits. Trump’s deduction increased this by 10 percentage points. However, these people saved little because they owed so little in taxes. Everyone else, including people under age 65 collecting Social Security (nearly 10% of recipients, none of whom got a tax break) and 10%-15% of high-earning Social Security recipients, still pay taxes on their benefits. Only wealthy individuals over 65 got a substantial tax break due to the new deduction.
The more important consequence of Trump’s higher deduction is that Social Security lost revenue from wealthy recipients because taxes on benefits go into the Social Security system. Consequently, the program will run out of money to pay promised benefits sooner rather than later. When this happens (2032 is the estimated default year), all recipients face a 20%-25% benefit cut. Average Social Security recipients, receiving around $2,000 a month from Social Security and having little additional income, would lose “bigly”. Trump’s tax break did nothing for them, and they risk losing what is for them a good chunk of change.
Trump’s promise of “no tax on tips” has similar flaws. Around 40% of households receiving tips paid no Federal income taxes on their tips before Trump’s promise and gained nothing from his Big Beautiful Bill. Tips remain subject to state and local income taxes, as well as Social Security and Medicare taxes. Tips exceeding $25,000 remain fully taxed.
Yet Trump frequently claims that he saved 440,000 tipped workers in Nevada, on average, $10,000. Trump has provided no evidence to support his claim. Actually, it can’t be true.
The tip deduction gets phased out starting at incomes of $150,000 for single individuals and $300,000 for couples. The maximum $25,000 tip deduction goes to taxpayers in the 24% tax bracket, with incomes near the phase-out levels. If you do the math, a $25,000 tip deduction saves at most $6,000 in taxes. An average tipped worker cannot gain $10,000 when the maximum gain is $6,000 and many tipped workers gain nothing. The only winners from Trump’s “no tax on tips” are a very few households with one earner making lots of money and another earner working mainly for tips.
Even if you don’t remember Trump’s fraudulent 2024 campaign promises, you should remember his promises since January 2025. He appointed Elon Musk to head up DOGE (the Department of Government Efficiency) to improve government efficiency and save the country over $1 billion. In early 2025 Trump promised to send $5,000 checks to every US citizen from the DOGE savings. However, independent auditors estimated that DOGE cost taxpayers between $21.7 billion and $135 billion. (The different estimates depend on whether or not one counts lost worker productivity due to DOGE and the cost of rehiring workers fired by DOGE.)
No one received a $5,000 check. This was probably the original intent, as Trump hates giving money to ordinary people.
Our next Trump lie demonstrates this—$2,000 checks promised to US households because of all the revenue the Treasury collected due to Trump’s tariffs. Despite Republican control of Congress and the Presidency, no tariff rebate became law and no checks went out.
Ironically, checks could have been issued, at no cost to the government, when the Supreme Court declared the tariffs illegal last February. Firms quickly sued the government for the tariffs they paid on imported goods and then passed on to consumers via higher prices. A 100% excess profits tax on tariff refunds would have provided revenue to reimburse the consumers ultimately paying the tax. And if this kept firms from claiming tariff refunds, the government would have had more money to refund Trump’s illegal tariffs to consumers (see “Consumers Here at Home Paid Trump’s Illegal Tariffs: Here’s How to Refund Their Money” in The Washington Spectator). $2,000 checks could have gone out.
Trump’s latest $5,000 promise has even bigger problems. It would add $1.3 trillion to the US budget deficit for the 2026-27 fiscal year, pushing it to $3.4 trillion, or 10% of US GDP. Only during times of war or economic crisis has the US run such a huge deficit. Unlike the Great Recession or Covid pandemic, when unemployment hit double digits, the reported US unemployment rate was 4.2% in September, close to full employment. A massive deficit now lacks any economic justification.
Giving lots of money to people also makes no sense with inflation running at 3.6%—compared to 2.4% when Trump was elected in 2024. Higher tariffs have led to rising inflation. The Iran War, immigrant deportations, and Trump’s huge tax cut also contributed. These forces continue exerting inflationary pressure on the US economy.
If Republicans were to win the mid-term elections, and if Trump paid his $5,000 election bribe, people would use the money to buy things, pushing prices up. In addition, the Federal government would have to borrow another $1.3 trillion during the current fiscal year (which began October 1). It would be forced to pay higher interest rates to lenders when it prints and sells bonds to get this money.
Consumer budgets would suffer. Rates on consumer loans are tied to the 10-year government bond rate, which reached a 2-decade high at the end of September, pushing average mortgage rates above 7.5%. If Trump gave away $1.3 trillion, bond and mortgage rates would rise even further.
Trump’s $5,000 checks would likely increase interest payments on a $500,000 mortgage by more than $64,000 over the lifetime of the mortgage, or nearly $200 a month. Consumers would also face higher interest rates on car loans and credit cards. Producers, including home builders and car makers, likewise would face higher borrowing costs. These will be passed on to consumers in the form of higher prices. In just a few years, most US households would see their $5,000 vanish through higher prices and higher interest rates. Then losses would accumulate.
The only winners from Trump’s bribery scheme would be wealthy individuals who don’t need $5,000 checks and don’t need to borrow money for home or auto purchases. They will lend more to the Federal government and receive more interest on their loans. In typical Trump fashion, everyone else loses.
At times like this we should be thankful Trump’s pants are on fire all the time. Undoubtedly, he won’t honor his $5,000 promise even if Republicans retain control of Congress after the mid-terms—something that seems increasingly unlikely as voters voice great disapproval of the Trump economy and polls suggest the possibility of a Big Blue Wave.
Steven Pressman is part-time professor of economics at the New School for Social Research, professor emeritus of economics and finance at Monmouth University, and author of Fifty Major Economists (Routledge, 2013).
